05/01/2011: Eurozone growth - January

For the first post of 2011. So a slightly belated wish to all of the readers: May 2011 be (in no particular order of importance):

• A prosperous and a fruitful one
• A healthy and a happy one
• A year for me to write better research and for you to comment more on it
  
• A year of renewing the political and economic strengths of the countries we call our homes.

Oh, and may the 30-year bull market in fixed income finally come to an end in 2011. Why you may ask? Because I, for one, am sick and tired of watching the sovereigns from the US to the EU to Japan borrowing beyond any control to underwrite unsustainable status quo of our bankrupt social democratic models. Leveraging our children and ourselves to pay for the dubious 'benefits' of redistributive 'justice' is unlikely to end with anything but tears. And the latter stage of history is uncomfortably close for all of us to continue ignoring the facts of our economic sickness.


Now, to the top of the newsflow from the EU-wide perspective.

The latest Eurocoin leading indicator for Eurozone growth was out recently and hence the updated details:
December performance was above November, reaching 0.49 - 4bps above November reading of 0.45. As of the beginning of January, Eurozone economy signals expansion that is yoy some 28% weaker than in January 2010 (December 2009 reading was 0.68).

Historically, Eurocoin is a pretty decent longer-term leading indicator (70%+ RSq) for the trend in the Eurozone GDP growth:
The new reading is consistent with growth of ca 2.0% and is driven primarily by industrial production and producer confidence. However, Eurozone industrial production growth has been declining persistently from the annual peak achieved back in May. Per latest (October) data, Germany continues to power ahead with strong positive growth, France and Italy remain at near zero growth and Spain's industrial output growth sticky in negative territory.

Composite PMIs for Germany (through December) powering ahead, while staying in contraction territory in France, Italy and Spain. Consumer confidence is at 2007 levels in Germany, while staying below the water line in other three economies (see chart):
Source: CEPR

I will be blogging on Ireland's PMIs in few hours tonight, so stay tuned for comparatives to the homeland.